Come September 15th, prepaid subscribers in the country will start rejoicing as a new directive released by the Telecom Regulatory Authority of India (TRAI) today allows them to use almost the full value of recharges done for their mobile phones. The regulator, with this directive, has directed the mobile service providers in the country to discontinue charging the processing fee that is levied on the recharge coupons currently.

Thank TRAI for This

Almost all of the mobile operators offer mobile recharge coupons for various denominations. However, most of these recharge vouchers come with a talk time that is almost half of what you pay for the voucher. This is because the operators levy a hefty processing fee and taxes on the amount. Thus, you are only credited a part of what you pay. Now, this directive instructs that the operators charge only a small administrative fee, not exceeding Rs. 2 per recharge voucher, plus the taxes. This means that you can get almost the full value of the recharge voucher of any denomination.

Although this move will be welcomed by the millions os subscribers all over the country, it will definitely go undigested with the mobile operators. According to the Hindu Business Line, almost 85 percent off all the mobile subscribers in India are prepaid subscribers. These subscribers account for almost 70 percent of the total revenue generated by the mobile operators. Effectively, these mobile operators will now have to offer more talk time to these subscribers due to TRAI’s decision.

Does this mean a fall in the revenue for the mobile operators?

To some extent, yes. TRAI’s directive has had no effect on the actual price of the recharge vouchers. So the operators end up getting the actual value that the user pays for. They, however, will now need to start offering more talktime to the users than before. Also, since the users now get more talktime to toy with, the frequency of recharges will decrease to a great extent. Previously, if you spoke worth Rs. 400 in a month and required 2 recharges for the same, the same will now be possible with just one recharge. That’s almost a saving of 50%. This, after September 15th, the mobile operators will see a huge drop in the revenues, due to this directive.

Not only that, the operators now will need to spend more on revving up the infrastructure, if at all there is an increase in the usage. So if you start experiencing dropped calls more frequently than before, you know who to blame.

But what made TRAI take this drastic decision? To put it in simple words, it was the ‘lack of transparency’. The regulator has also announced other consumer-friendly initiatives. For example, a subscriber can now move from one lifetime validity plan to another without paying any additional fee. These customers also do not need to recharge more than once in 6 months.

Here are the highlights of the Directive:

1. Subscribers to get full talk time on recharges, except for an administrative free not exceeding Rs. 2 plus taxes.
2. Subscribers to automatically get benefit of tariff reductions, without any preconditions of any action by the subscriber, such as sending an SMS.
3. Customers can migrate to newer lifetime plans without paying additional payments or recharges.
4. Lifetime subscribers need not recharge more than once every 6 months.
5. Tariff information to be made available in vernacular languages at all retail outlets and franchisees.
6. No change in mobile number when subscribers change tariff plans or move from prepaid to postpaid services.
7. Blackout days (customary/festival days on which free/concessional calls/SMS are not available) limited to a maximum of 5 days in a calendar year and the same need to be specified in advance.

These initiatives will be applicable from September 15th, 2008 and will be available for both new and existing subscribers.

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